New hub for Major League Baseball secondary ticket sales

San Francisco’s StubHub will announce a major play today, reaching a five-year agreement with Major League Baseball to become the official and exclusive online provider of secondary tickets for all 30 clubs starting next season.

The deal is a stunner. Just two years ago, MLB Advanced Media LP, the Internet arm of Major League Baseball, purchased Tickets.com, which in part was an effort to get its own stake in the ticket sales aftermarket as well as to undercut StubHub and other sites profiting from ticket scalping.

Now that same organization is handing over all secondary ticket sales to StubHub, a division of eBay. That would include the Double Play Ticket Window, a service of the San Francisco Giants, which allows season-ticket holders to sell their seats, with the Giants picking up a 10 percent fee from the buyer.

Primary ticket sales are not affected by the deal. Terms of the deal were not disclosed.

It’s unclear what implications the deal will have for companies like Ticketmaster, a division of IAC/Interactive Corp. and the online ticketing giant which came late to the lucrative secondary ticket market. StubHub offered the news under embargo, meaning the Chronicle could not contact competitors, teams or fans for reaction.

In a statement, StubHub president Chris Tsakalakis calls the deal a win-win and says his company will provide a safe, convenient marketplace for fans to buy and sell tickets.

In the same statement, Bob Bowman, CEO of MLB Advanced Mediam which manages the official league site, www.MLB.com, and each of the 30 individual team sites, said his aim is to provide “secure, simple and fan-friendly” ways for fans to buy and sell tickets.

Ironically, in June, Bowman told the New York Times: “We don’t want to teach our fans to go to StubHub. We thought we could make it safer and more reliable.”

The flip flop underscores the dilemma facing professional sports teams trying to come to terms with ticket scalping which has exploded in recent years on the Internet.

The secondary market for online sports and entertainment tickets at StubHub and rivals like RazorGator and TicketsNow has grown to an estimated $3 billion-a-year since 2000. StubHub operates as an open auction, taking a fee on each sale.

Basically, the sheer market force of the Internet has legitimized ticket scalping, once considered a shady practice. To wit: In January, San Jose-based eBay bought StubHub for $310 million to get a bigger piece of the action. Greater interest has created greater competition in the business of ticket reselling. And quite a bit of controversy.

The New England Patriots revoked the tickets of 52 season-ticket holders who sold their seats on StubHub rather than using the team’s own ticket exchange. Then the Patriots sued StubHub in Massachusetts state court for encouraging fans to defy the state’s antiscalping law. StubHub filed a countersuit. That dispute is being closely watched by the ticket industry.

StubHub has lobbied for changes in antiscalping laws in 10 states that have such laws on the books. Legislatures in some states have begun to eliminate barriers to secondary ticket sales. Some fans have applauded those moves because they can find more tickets at lower prices.

StubHub, once a dark horse in the ticketing world, seems to be making some significant strides. It is on a growth tear and last year was named by Inc. magazine as the fastest growing private retail company. Now it seems to be changing the minds of not just lawmakers and consumers about online scalping, but teams and leagues. Stubhub has moved aggressively to sign deals with sports teams eager to tap into the secondary ticket market. But this blockbuster marks the first exclusive ticket resale deal with a major sports league.